Selling so-called CRA debt, as the notes are commonly known, allows Fibria to raise funds at cheaper borrowing costs than Brazil’s overnight lending rate because of their tax-exempted nature, he said. Fibria can invest the proceeds in investments yielding higher returns, generating a financial gain, he said.

The company has yet to decide whether selling CRAs, and has not hired any banks to explore or underwrite a sale, Cavalcanti added. Fibria has about 1 million hectares (2.47 million acres) of land, giving it enough assets that could be used as collateral for future CRA sales, he added.

Companies with large swaths of land or receivables from crops already sold use CRAs as a powerful fundraising tool, because of strong demand from wealthy families and other individual investors that want to take advantage of 15 percent tax exemption the securities enjoy.

The market for asset-backed debt has offered farming and real estate companies the chance to tap much-needed financing at a time when Brazil undergoes the harshest bank loan retraction in at least two decades.

The income-tax exemption for retail bond investors means corporate borrowers can offer paying 4 percentage points to 5 percentage points below the Selic overnight rate, which now runs at 12.25 percent. Economists expect the Selic to end this year below 10 percent.